S&P Global Ratings has expressed confidence in the credit strength of Asian emerging and developing economies, citing their positive impact on the credit ratings of governments in the Asia-Pacific (APAC) region. The agency anticipates that these economies will contribute to maintaining stable credit ratings for most APAC nations in the coming one to two years.
1. Resilient Credit Ratings in APAC
Out of the 21 countries assessed by S&P in the APAC region, 19 are bestowed with a stable outlook, reflecting the overall strength of the economies in the area.
2. Investment-Grade Ratings
S&P underscores that the majority of sovereign ratings in Asia-Pacific are classified as investment grade, with the average rating falling between ‘BBB’ and ‘BBB+’. Notably, India holds a ‘BBB-‘ rating with a stable outlook.
3. Potential Risks
The report highlights potential risks to stable sovereign outlooks, pointing to the ongoing Russia-Ukraine conflict and tensions in the Middle East as factors that could pose challenges to the region’s economic stability.
4. Economic Growth Prospects
S&P acknowledges that economic growth in the Asia-Pacific region in 2024 may not match the strength seen in 2023 but expects resilience in most cases. Factors such as the recovery of international travel and an anticipated uptick in exports following a weaker 2023 contribute to this positive outlook.
5. Stable Sovereign Ratings
Stable outlooks on the majority of long-term foreign-currency sovereign ratings (19 out of 21) suggest minimal changes in the credit landscape over the next year or so. S&P expresses confidence in economic and financial conditions supporting the maintenance of current sovereign ratings.
6. Key Growth Contributors
S&P emphasizes that the growth of Asian emerging and developing economies will serve as a credit strength for many governments in the region. Several governments are identified as outperformers in terms of trend growth, contributing to the overall stability of the APAC region.
7. IMF Projections and India’s Growth
The International Monetary Fund’s projections highlight the APAC economies as the fastest-growing regional bloc. S&P projects a growth rate of 6.4% for India’s economy in the current and next fiscal years, building on the impressive 7.2% GDP growth in the 2022-23 fiscal year.
Important Questions Related to Exams
Q: What is S&P Global Ratings’ outlook for credit strength in Asian emerging economies?
A: S&P Global Ratings expresses confidence in the credit strength of Asian emerging economies, expecting stability in credit ratings for most governments in the Asia-Pacific (APAC) region over the next 1-2 years.
Q: How many countries in the APAC region have a stable outlook according to S&P?
A: Out of the 21 countries assessed in the APAC region by S&P, 19 have a stable outlook, emphasizing the overall strength of the economies in the area.
Q: What is the average rating of sovereign ratings in the Asia-Pacific region?
A: The majority of sovereign ratings in Asia-Pacific are investment grade, with the average rating falling between ‘BBB’ and ‘BBB+’.